Retrospective Denials Management Weaving together the Clinical, Technical, and Legal Components Glen Reiner, RN, BSN, VP of Clinical Operations Nicole Guido, VP Business Development
Our goals for our time today An overview of effective Denials Management approach Key Performance Indicators MAP Keys Description of team composition Review of possible Denials Management processes and workflows The importance of accurate data collection and analysis Specific Denials Management challenges 2
Revenue Cycle Imperatives How ACCA is Affecting the Revenue Cycle The complexities of today s coverage and reimbursement landscape demands a level of focus and expertise unparalleled in the past * Expanded Coverage Payment Cuts Improve Performance and Efficiency Patient Access - Eligibility Processes Denials Management/ Denials Prevention * Illustration adapted from hfmap Revenue Cycle Excellence presentation on Reform impacts 3
Define a Denial What is a denial? ANY CLAIM PAID LESS THAN EXPECTED How do you calculate the dollar impact of a denial? THE DELTA 4
Some of the keys to success include: Systems that collect data and processes that translate that data into information Front end processes to ensure eligibility, notification and authorization Ongoing and timely clinical review and communication with payors Contract management & IT systems that accurately calculate expected payments using complex reimbursement formulas Integrated denials management for both technical and clinical 5
Overview of Denials Management Process Role of the Denials Management Team Take responsibility for an assigned portion of a hospital s accounts receivable, beginning with the identification of a clinical, technical or legal denial The process should include: Initial Review Clinical Review Clinical & Technical Appeals Preparation & Referral to Legal Joint Operating Committees with Payors Follow up 6
Seamless integration of business office and clinical audit operations is imperative A process must be in place between AR staff and clinical staff The Hand-off Delivery of clinical denials to clinical staff (paper vs. electronic) Nurse Audit request (explanation of problem) RAs/EOBs/UBs Medical records Clinical audit inventory must be managed Distribution to clinical staff - Prioritization methodologies Productivity measurements Clinical outcome reports 7
Denials Management Team Composition Diverse team of experts comprised of: Project Management Nurses & Medical Directors Accounts Receivable/Billing Specialists Inpatient/Outpatient Coders Clerical Support Specialists Legal Support Considerations when building the team Existing resources, reporting relationships Corporate Partners 8
Denials Management Work Flow Model A/R Rep. Review Accept Adjust Close Technical Action Accept Denials Occurs Referral A/R Rep. Review Reconsideration, Appeal, Grievance * Follow Up Payment Close Clinical Legal Action Nurse Audit Accept Adjust Close * Referral to Legal as needed at any point 9
Denials Management Work Flow Status 10
Denials Management Data The data that is generated from the Denials Management process is almost as valuable as the additional revenue This information can be used by the facility to focus concurrent CM and UR efforts as well as improve clinical and PFS functions 11
HFMA s MAP Keys Sets a national standard for revenue cycle excellence Define the critical indicators of revenue cycle performance in clear, unbiased terms Ensure consistent reporting Each Key has a Purpose, Value and Calculation 12
Initial Denial Rate Zero Pay Purpose: Trending indicator of percentage claims not paid Value: Indicates providers ability to comply with payer requirements and payer s ability to accurately pay the claim Number of zero paid claims denied Number of total claims remitted 13
Initial Denial Rate Partial Pay Purpose: Trending indicator of percentage claims partially paid Value: Indicates providers ability to comply with payer requirements and payer s ability to accurately pay the claim Number of partially paid claims denied Number of total claims remitted 14
Denials Overturned by Appeal Purpose: Trending indicator of hospital s success in managing the appeal process Value: Indicates opportunities for payer and provider process improvement and improves cash flow Number of appealed claims paid Total number of claims appealed and finalized or closed 15
Denial Write-Offs as a Percent of Net Revenue Purpose: Trending indicator of final disposition of lost reimbursement, where all efforts of appeal have been exhausted or provider chooses to write off expected payment amount Value: Indicates provider s ability to comply with payer requirement and payers ability to accurately pay the claim Net dollars written off as denials Net patient services revenue 16
Payor Analysis 17
Denial Area Summary 18
Ideally, data from denials should directly feed continuous improvement efforts Conducting a root cause analysis for denials can identify opportunities for improvement and education ultimately preventing future denials for the same reason 19
Illustration of Cause and Effect Analysis Outcomes 20
Analysis of Denials Management root causes often reveal issues in multiple areas Technical Prior Auth Billing error Wrong Insurance Contract Coverage Eligibility Technical Prior Auth Denials Hospital Issues Legal Clinical/ Medical Payment less than expected Non-covered services Concurrent denials Grievance/appeal Process Denials Health Plan Issues Clinical/ Medical Onsite review Medical Director LOS/Delay days Not medically necessary Non covered service 21
Sample Denials Management Analysis System wide, the areas not under the Hospital System s immediate influence (Physician, Health Plan, and Patient) represented nearly 73% of the resolved denied claims: $6.5M of the total $8.6M Front End and Back End combined represented just under 10% of the total number of resolved denied claims, and just under 9% of the dollars The team had the most success appealing claims from the Health Plan Denial Area at 67% of total recovered dollars. The Physician Denial Area was a significant challenge with only 7% of total recovered dollars on all resolved claims The Physician Denial Area had the largest number of resolved denied claims at each hospital 22
Sample Denials Management Analysis At one hospital system an in-depth review demonstrated that the hospital had specific clinical issues Physician delay in discharge Patients no longer meeting inpatient criteria and documentation insufficient to support continued stay In cases where the patient is waiting for skilled nursing facility placement, roughly 40% of denied dollars were recovered on appeal/reconsideration Overutilization of ICU Short pays by health plans where the ICU level is not supported by documentation On appeal 32% of denied dollars in this category related to Physician use of ICU were recovered 23
Sample Denials Management Data Client Product Status Denial Reason Number Of Accounts DENIED Dollar Amount Denied # of accounts disputed APPEALED Percentage Of Accounts Appealed Dollar Amount Appealed Percentage Of Dollars Appealed ABC ZB AHCCCS/Health Plan Issue 7 $ 1,445.34 5 71% $ 864.86 60% ABC ZB Delay days or Delay in care 0 $ - 0 0% $ - 0% ABC ZB Denied days meet SNF(sub-acute) level of care 0 $ - 0 0% $ - 0% ABC ZB Disallowed charges 2 $ 36,992.08 2 100% $ 36,988.52 100% ABC ZB Documentation does not support expected tier 12 $ 7,382.96 11 92% $ 7,117.08 96% ABC ZB ESP or Dialysis days only 1 $ 127.32 0 0% $ - 0% ABC ZB FES/Emergent criteria or Stabilization 49 $ 17,914.57 26 53% $ 13,144.57 73% ABC ZB Mental health plan responsible for denied days 1 $ 72.06 1 100% $ 72.06 100% ABC ZB OBS. V. Inpatient 1 $ 1,078.82 0 0% $ - 0% ABC ZB Other 2 $ 3,452.14 1 50% $ 3,206.40 93% ABC ZB Technical Issue 22 $ 7,846.50 22 100% $ 7,846.50 100% TOTAL ZERO BALANCE 97 $ 76,311.79 68 70% $ 69,239.99 91% 24
$5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 Tracking of short pays over time will identify unwanted trends, not always reasons $0 Short Pay Dollars 600 500 400 300 200 100 0 Short Pay Claims 25
Sample Denials Management Results $26,170,509 in denied charges with a recovery rate of 54.05% Financial Class Denied Charges Recovery Rate Medicaid $13,172,392 42.60% Commercial $5,094,094 72.03% Medicare-Risk $2,069,817 53.35% BCBS $4,116,301 79.20% Medicare $1,711,123 29.24% 26
Closing The Loop By using the data to focus concurrent processes and drive educational efforts the Denials Management Team and the hospital were able to produce the following results: After a concentrated education and document improvement effort the overall recoveries from the Physician Denial area showed a dramatic increase (40%) Revise Process/Educate Review Results The fact that the recovery rate increased while the denial rate remained stagnant is an indication that the documentation improved, but the plan s behavior is lagging behind Recommend Root Cause 27
Specific Denials Management Challenges Emergency Department denials Observation versus Inpatient Inpatient cases where documentation does not support inpatient level of care Many times are being paid $0.00 Very difficult to appeal retrospectively with a valid inpatient order Best place to catch these denials is at the time of admit Denials Management data can be used to focus these efforts 28
Specific Denials Management Challenges Elective Surgery denials Scheduled and authorized as outpatient, but made inpatient after the procedure The chart contains an outpatient authorization, an inpatient order and the documentation supports outpatient level of care These claims are either being short paid or paid at $0.00 Very difficult to argue on appeal with out excellent documentation of complications Addressing these denials concurrently will require excellent communication with the Clinicians, Scheduling and Case Management Documentation improvement program is also a possibility 29
Specific Denials Management Challenges Discharge to a lower level of care Awaiting bed availability or placement Possibility of partnering with appropriate alternative care facilities Risk-sharing Readmission Denials The same or similar diagnosis Can be technical and/or clinical issue 30
Clinical Denials Management is an Essential Component of the Revenue Cycle Prevents money from being left on the table Provides great insight into process improvement opportunities Requires specific, detailed processes and resource allocation Systems for data analysis and comparison are crucial Strong clinical integration is imperative 31
Thank you for your time! Questions? 32
Adreima Contact Information Glen R. Reiner Vice President of Clinical Operations Phone: (602)636-5530 - Cell: (602)373-3565 greiner@adreima.com Nicole Guido Vice President of Business Development Cell: (619)253.1465 nguido@adreima.com 33